In a significant development that is expected to benefit credit card users, the State Bank of Pakistan (SBP) has authorised the settlement of credit cards issued by various banks through the interbank exchange rate.
The difference in interbank and open market rates of US dollar in local market is around Rs30.
This decision, effective immediately until July 31, 2023, was announced in a circular issued by the central bank on Wednesday.
According to the circular, the SBP has granted permission to banks and financial institutions to acquire US dollars from the interbank market for the purpose of settling card-based cross-border transactions with International Payment Schemes (IPS) such as Visa and Mastercard.
The circular states, “Authorised dealers are now allowed to purchase USD from the interbank market for settlement of card-based cross-border transactions with IPS.”
Previously, credit card settlements were conducted through the open market.
However, with this recent development, the settlement process will now take place through the interbank counter.